Classification of Operations

FR – Aug 2022 – L2 – Q5b – Financial Reporting Standards and Their Applications

Determine whether Rivoli Hotel Ltd’s disposal and refurbishment decisions meet the criteria for classification as discontinued operations under IFRS 5.

Question

Rivoli Hotel Ltd’s sole activity is the operation of hotels in major cities across Ghana. After a period of declining profitability due to the COVID-19 pandemic, the company made the following decisions during the year ended 30 April 2022:

i) Rivoli Hotel Ltd disposed of all its hotels in City A.

ii) Rivoli Hotel Ltd refurbished all its hotels in City B to target the holiday and tourism market, shifting away from business clients.

Required:

Treating the two decisions separately, justify whether they meet the criteria for being classified as discontinued operations in the financial statements of Rivoli Hotel Ltd for the year ended 30 April 2022.

Answer

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Tags: Classification of Operations, Discontinued Operations, Financial Statements, IFRS 5, Operations Disposal
Level: Level 2

Topic: Financial Reporting Standards and Their Applications
Series: AUG 2022

Question Tag: Classification of Operations

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FR – Aug 2022 – L2 – Q5b – Financial Reporting Standards and Their Applications

Determine whether Rivoli Hotel Ltd’s disposal and refurbishment decisions meet the criteria for classification as discontinued operations under IFRS 5.

FR – Aug 2022 – L2 – Q5b – Financial Reporting Standards and Their Applications

Determine whether Rivoli Hotel Ltd’s disposal and refurbishment decisions meet the criteria for classification as discontinued operations under IFRS 5.

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Question Tag: Classification of Operations

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FR – Aug 2022 – L2 – Q5b – Financial Reporting Standards and Their Applications

Determine whether Rivoli Hotel Ltd’s disposal and refurbishment decisions meet the criteria for classification as discontinued operations under IFRS 5.

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FR – Aug 2022 – L2 – Q5b – Financial Reporting Standards and Their Applications

Determine whether Rivoli Hotel Ltd’s disposal and refurbishment decisions meet the criteria for classification as discontinued operations under IFRS 5.

You're reporting an error for "FR – Aug 2022 – L2 – Q5b – Financial Reporting Standards and Their Applications"

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